This week the Minnesota Management and Budget (MMB) announced July 1, 2014, that $150 million was deposited today into the State Budget Reserve – the first increase in 13 years. These new funds were dedicated to the Reserve by Governor Mark Dayton and the Minnesota Legislature during the 2014 Legislative Session. At $811 million, this is the highest level the Reserve has been at in the state’s history and the first increase since 2001.

 Minnesota’s economy continues to grow and we are clearly turning the corner on over a decade of deficit spending, which has burdened our state and our especially seniors, students, working families and people with special needs. The DFL-controlled Legislature invested in education and jobs at the same time and the positive impacts of this will be felt going forward. The legislation that was signed into law last session also dedicated one-third of future budget balances to the reserve, allowing it to increase in the future. This step is a significant factor in continuing to build economic stability in Minnesota in years to come.

2014 legislative session · economic security · Mark Dayton · Minnesota budget reserve

State

After the two most productive years at the State Capitol in a generation, GOP leaders hit the road to tell Minnesotans the sky is falling.

It’s important for voters to take a look at the comments made by House Minority Leader Rep. Kurt Daudt (R-Crown) and Senate Minority Leader David Hann (R-Eden Prairie) and separate rhetoric from reality.

Economy

Rep. Daudt’s rhetoric: “I think we’re starting to see that the policies that Democrats have put in place have not really served Minnesota’s economy well and hasn’t served Minnesota families very well.”

Reality:

• There are more people working Minnesota then at any other time in history.
• 33,000 jobs will be created under the $1 billion investment in roads, college classrooms, water systems, and other community assets.
• For the first time in a decade, Minnesota’s minimum wage will increase. An estimated 325,000 hard-workings Minnesotans will see their pay increase to $9.50 an hour by 2016. The minimum wage will be indexed to inflation starting in 2018 to keep up with the cost of living.
  • Raising the minimum wage to $9.50 would help working people support their families and local businesses by boosting our economy by $472 million in increased consumer spending.
  • Raising the minimum wage to $9.50 would mean more economic security for 137,000 children whose parents are low-wage earners. An additional $1,000 of average annual family income throughout early childhood can result in higher reading and math scores for children in low-income families.
• The Women’s Economic Security Act enacts new protections for pregnant women in the workplace; expands family and sick leave for working families; and expands economic opportunity for women in high-wage, high-demand jobs.
  • When women are successful, families are successful.
• Minnesota companies announced plans in the first quarter of 2014 for 31 expansion projects that will create nearly 1,800 jobs in Minnesota.
• In 2013, a study by the U.S Bureau of Economic Analysis found Minnesota was 5^th in growth of gross domestic product.
• In 2013, Forbes Magazine’s list of “best states for business” ranked Minnesota number eight. Minnesota jumped 12 spots in just one year.

Taxing, spending and priorities

Sen. Hann rhetoric: “We just ended two years now of complete DFL control of Minnesota government. We saw a lot of taxing and a lot of spending but we’re really concerned about the priorities they’ve set.”

Reality on taxing:

• The budget deficit left by Republicans was closed by increasing income taxes on the top 2 percent of Minnesotans, increasing taxes on cigarettes and three business-to-business taxes.
  • 98 percent of Minnesotans are not paying more in income taxes. This impacts people with an average salary of $617,000 a year. And it’s a tax fairness issue: Prior to this change, The wealthiest 2 percent of Minnesotans paid 20 percent less in taxes as a share of their income than the other 98 percent of Minnesotans.
  • A goal of increasing the cigarette tax is to deter young people from smoking and encourage long-time smokers to quit. The health care costs in Minnesota directly caused by smoking are $2.51 billion a year.
  • Thanks to the budget surplus, the three business-to-business taxes imposed in 2013 to help close the budget deficit were repealed in 2014.
• Thanks to budget surplus, Gov. Dayton and legislators were able to provide tax cuts for more than 2 million Minnesotans. This includes: new tax credits and deductions for college students; the elimination of the marriage penalty; tax cuts for working families; and property tax relief for homeowners, renters and farmers.

Reality on spending:

• The DFL made a major investment in early childhood education.
• All children will have access to free all-day, every day kindergarten, which helps students get a good start their education and saves parents money.
• A two-year tuition freeze at the University of Minnesota and Minnesota State Colleges and Universities (MnSCU), a savings to low- and middle-income students and their families.
• Minnesota schools will receive an additional $23 million in state funding, or another $25 for every student in the state.
• Thanks to the Safe and Supportive Schools Act, schools will have new tools to help prevent bullying and respect among students.
• New investments in nutrition mean that no student will ever be denied a healthy lunch at school.

• For the first time since 2001, more funding was put into the state’s budget reserve. By putting more $150 million in the reserve, Minnesota is better insulated from any potential future economic downturns.

For the first time in years, the state had a true budget surplus. With this $1.2 billion, Gov. Dayton and DFL legislators were able to make critical investments in heating assistance for low-income families during the brutal winter, provide additional school funding and pay cash for projects that will help grow communities’ economies and put Minnesotans to work.

After the two most productive years at the State Capitol in a generation, GOP leaders hit the road to tell Minnesotans the sky is falling.

It’s important for DFLers to take a look at the comments made by House Minority Leader Rep. Kurt Daudt (R-Crown) and Senate Minority Leader David Hann (R-Eden Prairie) and separate rhetoric from reality.

Economy

Rep. Daudt’s rhetoric: “I think we’re starting to see that the policies that Democrats have put in place have not really served Minnesota’s economy well and hasn’t served Minnesota families very well.”

Reality:

• There are more people working Minnesota then at any other time in history.
• 33,000 jobs will be created under the $1 billion investment in roads, college classrooms, water systems, and other community assets.
• For the first time in a decade, Minnesota’s minimum wage will increase. An estimated 325,000 hard-workings Minnesotans will see their pay increase to $9.50 an hour by 2016. The minimum wage will be indexed to inflation starting in 2018 to keep up with the cost of living.
  • Raising the minimum wage to $9.50 would help working people support their families and local businesses by boosting our economy by $472 million in increased consumer spending.
  • Raising the minimum wage to $9.50 would mean more economic security for 137,000 children whose parents are low-wage earners. An additional $1,000 of average annual family income throughout early childhood can result in higher reading and math scores for children in low-income families.
• The Women’s Economic Security Act enacts new protections for pregnant women in the workplace; expands family and sick leave for working families; and expands economic opportunity for women in high-wage, high-demand jobs.
  • When women are successful, families are successful.
• Minnesota companies announced plans in the first quarter of 2014 for 31 expansion projects that will create nearly 1,800 jobs in Minnesota.
• In 2013, a study by the U.S Bureau of Economic Analysis found Minnesota was 5^th in growth of gross domestic product.
• In 2013, Forbes Magazine’s list of “best states for business” ranked Minnesota number eight. Minnesota jumped 12 spots in just one year.

Taxing, spending and priorities

Sen. Hann rhetoric: “We just ended two years now of complete DFL control of Minnesota government. We saw a lot of taxing and a lot of spending but we’re really concerned about the priorities they’ve set.”

Reality on taxing:

• The budget deficit left by Republicans was closed by increasing income taxes on the top 2 percent of Minnesotans, increasing taxes on cigarettes and three business-to-business taxes.
  • 98 percent of Minnesotans are not paying more in income taxes. This impacts people with an average salary of $617,000 a year. And it’s a tax fairness issue: Prior to this change, The wealthiest 2 percent of Minnesotans paid 20 percent less in taxes as a share of their income than the other 98 percent of Minnesotans.
  • A goal of increasing the cigarette tax is to deter young people from smoking and encourage long-time smokers to quit. The health care costs in Minnesota directly caused by smoking are $2.51 billion a year.
  • Thanks to the budget surplus, the three business-to-business taxes imposed in 2013 to help close the budget deficit were repealed in 2014.
• Thanks to budget surplus, Gov. Dayton and legislators were able to provide tax cuts for more than 2 million Minnesotans. This includes: new tax credits and deductions for college students; the elimination of the marriage penalty; tax cuts for working families; and property tax relief for homeowners, renters and farmers.

Reality on spending:

• The DFL made a major investment in early childhood education.
• All children will have access to free all-day, every day kindergarten, which helps students get a good start their education and saves parents money.
• A two-year tuition freeze at the University of Minnesota and Minnesota State Colleges and Universities (MnSCU), a savings to low- and middle-income students and their families.
• Minnesota schools will receive an additional $23 million in state funding, or another $25 for every student in the state.
• Thanks to the Safe and Supportive Schools Act, schools will have new tools to help prevent bullying and respect among students.
• New investments in nutrition mean that no student will ever be denied a healthy lunch at school.
• For the first time since 2001, more funding was put into the state’s budget reserve. By putting more $150 million in the reserve, Minnesota is better insulated from any potential future economic downturns.

For the first time in years, the state had a true budget surplus. With this $1.2 billion, Gov. Dayton and DFL legislators were able to make critical investments in heating assistance for low-income families during the brutal winter, provide additional school funding and pay cash for projects that will help grow communities’ economies and put Minnesotans to work.

2014 legislative session · David Hann · Kurt Daudt · Rep. Kurt Daudt · Republican rhetoric · sd48 · Sen. Hann

Dear Neighbors,

The adjournment of the House of Representatives on May 16 brought to a close an incredibly productive 2013-2014 legislative biennium.  Given the significance of what was achieved, I thought you might appreciate a recap of some of the accomplishments.

When the 2013-2014 biennium began on January 8, 2013, Minnesota faced a $627 million deficit, we owed our schools over $800 million, and property taxes were on the rise. Fortunately, the 2013 Legislature began to move Minnesota in a different direction by:

• Paying back the money borrowed from our schools. (I authored this bill in the MN House)
• Making historic investments in education, from early childhood to college, including a tuition freeze at our public postsecondary institutions, free all-day kindergarten for every child for the first time in state history, and an early childhood scholarship program that will give thousands more youngsters access to high-quality early learning opportunities. These investments are researched based with accountability measures attached.
• Creating more jobs through investments in initiatives like the Minnesota Investment Fund, which helps to bring new businesses to our state and helps existing businesses expand, and expanding the Angel Investment Credit fund.
• Closing corporate tax loopholes.
• Eliminating the gift tax and raising the estate exemption (a bill I authored)
• $550 million dollars in tax cuts for Minnesotans
• Enacting a fair and balanced budget that replaces a decade of “all-cuts and gimmicks” budgeting.  After being downgraded during the last legislative biennium, our credit rating is beginning to rise again, which will save our taxpayers’ hard earned money.

Since then, Minnesota’s economy has grown, the unemployment rate dropped, and the deficit turned into a surplus.  This year the Legislature built upon the successes of the 2013 session, and continued to move Minnesota forward in significant ways.  For example:

Budget

Nowhere is Minnesota’s positive direction more evident than when looking at the state’s “bottom line.” After a decade of deficits and “budget gimmicks,” Minnesota now has a stable budget into the future. Last year we balanced our deficit honestly and this year we had a $1.2 billion surplus. We utilized our surplus responsibly, providing tax cuts, making key investments in bread-and-butter priorities like education, and strengthening our budget reserve to keep our budget structurally balanced into the future.

Tax Cuts

In 2014 the Legislature provided approximately $200 million in  income tax relief by conforming Minnesota’s income tax code to key federal provisions.  Conformity reduces taxpayer confusion, makes filing the state income tax simpler, and provides tax benefits that Minnesotans expect.  For example, the marriage penalty was fixed, and the dependent care credit and working family credits were improved.  Families paying higher education tuition or who have student loans will also benefit.

The gift tax was eliminated, and the estate exemption was increased (a bill I authored).

All told, more than 2 million Minnesotans will benefit from tax cuts passed by the 2014 Legislature.

Education

Last year, the Legislature brought a decade of disinvestment in education to an end, making historic investments to fund all-day kindergarten and freeze tuition at our public colleges and universities.  This year the state’s commitment to education continued.  Among other things, a $25 per pupil increase in the funding formula was enacted.  Perhaps most important, the bill I authored in which school lunch aid was increased to ensure that students are not denied a hot meal at lunchtime became law.  Special financial assistance will also be provided to school districts to guarantee that all kindergartners, regardless of ability to pay, receive breakfast.

 Jobs

More than 50,000 jobs have been created in Minnesota since the 2013-2014 biennium began, which means all of the jobs lost during the Great Recession have been recovered.  This session the Legislature continued to build on that progress by focusing on job creation and economic development.

This session the Legislature adopted, with broad bipartisan support, the Women’s Economic Security Act (WESA).  This new law strives to close the “wage gap” and promote the overall economic standing of women and their families by investing in initiatives that: (1) help women enter and stay in high-wage, high-demand, non-traditional occupations; and (2) promote the creation and expansion of women-owned businesses (I authored the Women’s Entrepreneurs bill to accomplish this).

WESA’s provisions also eliminate barriers to the economic well-being of women and their families by ensuring equal pay for equal work, expanding parenting and sick leave for working families, and enhancing employment protections for pregnant workers.  When women have equal opportunities to succeed, it means stronger families, stronger communities, and a healthier Minnesota economy.

This year the Legislature also addressed the needs of Minnesota’s lowest paid workers.  The compromise minimum wage law which passed will begin with a phased-in increase in August 2014—boosting the wages of over 300,000 Minnesotans.

Capital Investment

In an ongoing effort to create good paying jobs and support our state’s improving economic health, the Legislature enacted a bipartisan capital investment package containing strategic investments spread through every corner of the state. These measures will provide thousands of private sector jobs and fund crucial investments in college campuses, roads, bridges, wastewater treatment plants, flood prevention and mitigation, parks & trails, housing, and other important infrastructure.  In our area, the St. David’s Center, used by many of our families, received funding to renovate and expand.

Minnesota’s Future is Bright

Clearly, Minnesota has momentum, but there is more work to be done to ensure we keep our middle class strong, and our state and community headed in the right direction. Looking forward, we must continue to address the bread-and-butter issues vital to Minnesota’s future.

It is my goal that in upcoming sessions we can build upon the significant achievements enacted during the 2013-2014 biennium.  I am committed to working on a bipartisan basis for the good of our community, and I will always place Minnesota’s long-term needs ahead of partisan politics.  To that end, I look forward to spending this summer and fall visiting with you and other members of our community about how we keep our state moving forward.

As always, thank you for the honor of serving you in the Minnesota Legislature.  Please always feel free to contact me whenever I can be of assistance at or 651-296-3964.

Best,

Yvonne

Rep. Yvonne Selcer, 48A
523 State Office Building
Saint Paul, MN 55155
651.296.3964

2014 legislative session · closing corporate tax loopholes · eliminating gift tax · HD48A · House District 48A · investing in education · job creation · middle class tax cuts · no gimmicks budget · paying back our schools · raising the estate tax · Rep. Selcer · WESA · women's economic security act · Yvonne Selcer